Spruce Power Holding Corporation

Hello, everyone. Thank you for joining us and welcome to the Spruce Power Second Quarter 2026 Earnings Results Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Julia Gaspar, Corporate Development and Investor Relations. Julia, please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Spruce Power's second quarter 2026 earnings conference call. Joining me today are Chris Hayes, versus chief executive officer, and Tom Cimino, the company's chief financial officer. Before we begin, I would like to remind you that we will comment on our financial performance using both GAAP and non-GAAP financial measures. Important information about these non-GAAP financial measures, including reconciliations, most comparable GAAP measures, is included in our earnings release for the second quarter of 2026, which is available on the investor relations section of our website. Our discussion today will also include forward-looking statements to reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release and SEC filings for a discussion of these risk factors. With that, I will now turn the call over to Chris Hayes, Chief Executive Officer of Spruce Power. Chris?

Thanks, Julia, and good afternoon, everyone. We delivered a solid second quarter and executed against the priorities we outlined at the beginning of the year. Disciplined execution across the organization enabled us to deliver operating EBITDA ahead of the prior year. We also generated higher operating income, returned to positive gap net income, and reduced debt while maintaining a disciplined approach to liquidity. Revenue totaled $30.3 million compared with $33.3 million in the prior year period. Despite the decline in revenue, Income from operations increased 10% to $9.8 million. Net income attributable to stockholders was $3.3 million or $0.14 per diluted share compared with a net loss attributable to stockholders of $3 million or $0.17 per diluted share in the second quarter of 2025. The composition of the quarter is important. Combined PPA and SLA revenue increased 2% year over year to $22.5 million, and our portfolio generated approximately 196,000 MWh of power, up from 187,000 MWh a year ago. Lower SP5 SREC production and a slower-than-anticipated ramp in Spruce Pro revenue were the principal revenue headwinds. Those two factors were distinct from the underlying performance of our recurring customer portfolio, which remained stable. At the same time, core operating expenses, which include SG&A and O&M, declined 21% year-over-year to $13.8 million and remained below $15 million for the fourth consecutive quarter. SG&A expense declined 26% to $11.3 million, primarily reflecting lower labor and professional services costs from our project to streamline operating expenses. The year over year improvement is particularly notable because second quarter SG&A also includes a number of non-recurrent costs. Excluding these discrete items, the underlying cost structure continues to demonstrate the structural benefits of the efficiency actions we implemented over the past several quarters. O&M expense was 2.5 million compared with 2.2 million in the prior year quarter. O&M was favorable relative to plan because non-routine service activity ramped Thank you for joining us. Our in-house field services model continues to be an important part of that operating strategy. We have reduced servicing costs across our New Jersey portfolio and are extending the same approach into Southern California. As the rollout matures, we believe it can lower servicing costs per system, shorten repair cycle times, and give us greater control over service quality and system uptime. Operationally, our approximately 83,000 customer contracts generated recurring customer payments under long-term agreements across a geographically diversified portfolio. Our customer satisfaction score was 80% for the quarter, reflecting the focus of our teams on customer service and operational execution. We are evaluating practical opportunities to use automation and artificial intelligence across customer service, asset management, finance, and other core functions. The focus is on targeted applications that can reduce manual work, improve data quality and service levels, and support productivity without adding unnecessary overhead. Turning to liquidity and financing, we preserved liquidity and reduced debt during the quarter. We ended the quarter with total cash and restricted cash of $81.5 million and repaid $7.9 million of debt principal. Tom will discuss the quarter end balances in more detail. Refinancing remains a critical near-term priority. As required under GAAP, our quarter end financial statements include a going concern disclosure because The SP1 and SP2 maturities fall within 12 months of the financial statements issued in states and we had not entered into committed refinancing arrangements as of that date. The current classification of SP1 and SP2 caused the reported negative working capital position at quarter end. We are in preliminary discussions with potential lenders regarding SP1 and are evaluating Refinancing alternatives for both SP1 and SP2. We recognize the importance and timing of these maturities and are approaching the process with appropriate urgency. Our objective is to complete refinancing solutions ahead of the applicable maturities while preserving liquidity and maintaining a capital structure appropriate for the scale and maturity of the portfolio. Looking ahead, our priorities are unchanged. First, continue to improve the efficiency, service quality, and profitability of our operating platform. Second, execute our refinancing initiatives while maintaining disciplined liquidity management. And third, take a disciplined approach to growth including portfolio acquisitions, programmatic partnerships, and Spruce Pro servicing relationships. Overall, The quarter demonstrates that our cost control actions are translating into stronger profitability. We are focused on disciplined execution through the second half of 2026. With that, I will turn the call over to Tom.